Gold Stocks Take a Pounding in a Bear Hug

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Since early March, when the dollar gold bullion price spiked to $1,030/oz, listed gold stocks have taken a pounding, with an average loss of about a third for each of 75 selected gold stocks listed around the world. Even Barrick, the world's biggest gold producer, has surrendered nearly a third of its value.

Since early March, when the dollar gold bullion price spiked to $1,030/oz, listed gold stocks have taken a pounding, with an average loss of about a third for each of 75 selected gold stocks listed around the world. Even Barrick, the world's biggest gold producer, has surrendered nearly a third of its value.

Much like listed silver stocks, gold stocks tend to show a high "beta" - over-reacting in both directions according to movements in underlying metal prices. In line with a number of agricultural commodities, gold and silver prices have been heavily driven as "crisis" hedges, most recently to counter the credit markets crisis triggered by the August 2007 implosion of the US subprime mortgage bond market. But where speculators have rotated interest in agricultural commodities - most recently into rice - gold and silver prices peaked out early in March this year.

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